KPMG Survey of Corporate Responsibility Reporting 2017 PDF

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The road
ahead
The KPMG Survey of Corporate
Responsibility Reporting 2017
kpmg.com/crreporting
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. www.kpmg.com/crreporting | 0
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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Contents
About this survey 2 Linking CR activity to the Sustainable Development Goals
Research samples: the N100 and G250 3 SDGs emerge as a clear trend in CR reporting 39
Executive Summary 4 SDG reporting among the world’s largest companies 42
What do these findings mean for business? 6 Acknowledging human rights as a business issue
Quantitative global trends in corporate responsibility reporting Human rights is firmly on the agenda as a global business issue 44
N100 companies continue to catch up with the G250 9 Companies in India, the UK and Japan are the most likely to discuss 46
human rights
Reporting in Latin America grows, Eastern Europe yet to catch up 11
Mining companies are the most likely to acknowledge human rights 47
Regulation, stock exchanges and investor pressure drive national 15
reporting rates Linking carbon targets to the global climate goal
Lagging sectors gain ground 20 More companies set carbon targets 49
More companies include CR data in annual financial reports 21 Most carbon targets are not linked to greater climate goals 50
Integrated Reporting takes off in certain countries 24 How we can help 51
Assurance of CR data continues steady growth 26 Methodology 52
GRI remains the most popular framework for CR reporting 28 Acknowledgments 56
Acknowledging the financial risks of climate change
Three quarters of companies worldwide yet to acknowledge climate 30
change as a financial risk
Very few companies quantify climate risks or model their financial 31
impacts
What is driving acknowledgement of climate risk in the leading 32
countries?
Mixed picture for TCFD priority sectors among the N100 33
Climate risk reporting: the world’s largest companies (G250) 34
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© 2017 KPMG International Cooperative (“KPMG©International”),

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About this survey

Welcome to the KPMG Survey of Corporate Lead authors
Responsibility Reporting 2017.
José Luis Blasco
This is the 10th survey since the first edition was published in 1993. This
Global Head, KPMG
year, KPMG member firm professionals reviewed corporate
Sustainability Services
responsibility (CR) and sustainability reporting from 4,900 companies in
49 countries and regions, making this the most extensive survey ever.
The survey provides a detailed look at global trends in CR reporting and
insights for business leaders, company boards, and CR and
As well as leading KPMG’s global Sustainability Services network, José Luis also heads the
sustainability professionals. It is designed to offer guidance on good
Sustainability Services practice at KPMG in Spain and has served as Head of Governance, Risk and
practice to corporate professionals who assess and prepare their own
Compliance at KPMG in Spain. He joined KPMG in 2003 after working in the third sector, and was
organization's CR reporting. It also serves as a guide to investors, asset
appointed a Partner in 2008.
managers and ratings agencies who now factor environmental, social
and governance (ESG) information into their assessments of corporate José Luis advises major companies on incorporating the risks and opportunities of environmental
performance and risk. and social megatrends into their corporate strategies. He plays an active role in many well-known
sustainability initiatives and organizations including the GRI, International Integrated Reporting
The survey is based on several months of research, with KPMG
Council (IIRC), World Business Council for Sustainable Development (WBCSD) and the United
member firm professionals analyzing thousands of company financial
Nations Environment Programme (UNEP).
reports, corporate responsibility reports, and websites. The number of
companies and markets involved in the survey means that it is one of
the most comprehensive and authoritative pieces of research on CR Adrian King
reporting available worldwide. KPMG Global Sustainability
Reporting & Assurance Leader
This year the survey spotlights four major
emerging trends within CR reporting:
— Reporting on climate-related financial risk
Adrian is the Partner in Charge of the Sustainability Services practice at KPMG in Australia. He has
— Reporting on the UN Sustainable Development Goals more than 25 years’ experience working with global public and private companies to provide
(SDGs) financial and non-financial advisory, reporting and assurance services. Adrian works with clients to
help them respond to all financial and non-financial challenges, with a particular focus on health &
— Reporting on human rights
safety, environmental and community issues in order to manage risk, create value and achieve a
— Reporting on carbon reduction targets competitive advantage. Adrian was the Global Head of KPMG’s Sustainability Services network
from 2014 to 2017.
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Research samples: the N100 and G250

Throughout this document, the reader will see statistics quoted for two
different research samples: the “N100” and the “G250”.
N100 G250
The N100 refers to a worldwide sample of 4,900 The G250 refers to the world’s 250 largest
companies comprising the top 100 companies by companies by revenue based on the Fortune 500
revenue in each of the 49 countries researched in ranking of 2016. Large global companies are
this study. These N100 statistics provide a broad- typically leaders in CR reporting and their behavior
based snapshot of CR reporting among both large often predicts trends that are subsequently
and mid-cap firms around the world. adopted more widely.
For more details on these research samples, a full list of the 49 countries and
regions covered and the research methodology see page 52.
For more information about the survey and to explore the data in more detail using an interactive online
tool, visit kpmg.com/crreporting.
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©
© 2017
2017 KPMG
KPMG International
International Cooperative
Cooperative (“KPMG
(“KPMG International”),
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Executive Summary
Acknowledging the financial risks
Quantitative trends in corporate responsibility reporting
of climate change
72%
This survey confirms of the
CR reporting is standard Most of the world’s that a majority of N100 do not
practice for large and biggest companies now companies do not
mid-cap companies integrate financial and acknowledge climate
52%
around the world. non-financial data in their of the
change as a financial risk
Around three quarters of the annual financial reports G250 do not
in their annual reports
companies studied in this
4,900 survey issue CR reports.

See page 9.
(78 percent), suggesting they believe CR
information is relevant for investors. See page 21.
Of the minority that do acknowledge climate risk,
very few attempt to quantify or model the business
value at stake. The statistics support the need for
initiatives such as the Financial Stability Board’s
Task Force on Climate-related Financial Disclosures
All industry sectors show a healthy rate
Assurance of CR data has more than doubled (TCFD). See page 30.
of CR reporting: for the first time in the
12
among the G250 in the last
history of this survey, every sector has a
60%
reporting rate of or more. years
See page 20. Linking corporate responsibility activity
(now 67 percent of reports),
indicating that the largest companies to the UN Sustainable Development
see value in promoting the reliability Goals (SDGs)
of this information. Assurance is also
43%
Latin America has seen increasing at a steady rate among The SDGs have of G250
a surge in CR reporting N100 companies. See page 26. resonated strongly with reporters
in the last two years, businesses worldwide in
driven by regulation, foreign investor less than two years
39%
demand and the need to build and protect GRI remains the most popular since their launch. Many of N100
public trust. See page 13. framework for CR reporting. already connect their CR reporters
Around two thirds of reports activities to the SDGs
analyzed in this survey apply the This is a clear trend that has emerged in a short
“Integrated Reporting” has GRI G4 Guidelines or Standards. space of time and strongly suggests that the SDGs
taken off in Japan, Brazil, See page 28. will have a growing profile in CR reporting over the
Mexico and Spain. See page 24. next two to three years. See page 39.
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Acknowledging human rights as a business issue
Human rights is firmly on the

agenda as a global business
issue. A clear majority of CR
reports now acknowledge the
issue of human rights: around
three quarters of the N100
(73 percent) and nine out of ten
(90 percent) in the G250.
However, the lack of a public human rights policy at many
companies suggests there is still work to do, and only a
minority of businesses are yet prepared to align themselves
publicly with the UN Guiding Principles on Business & Human
Rights. See page 44.
Linking carbon targets to the global climate goal
A solid majority of reports from the world's largest

companies (G250) now disclose targets to cut their
carbon emissions: the percentage in 2017 stands at
67%
Yet, most of these firms do not relate their own targets
to the climate goals being set by national governments,
regional authorities or the UN, such as The Paris
Agreement which commits countries to limit global
warming to well below 2°C. See page 49.
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©
© 2017
2017 KPMG
KPMG International
Swiss entity.
entity. Member
Member firms
firms of
of the
the KPMG
KPMG network
network of
of independent
independent firms
firms are affiliated with KPMG International. KPMG International provides no client services. www.kpmg.com/crreporting
www.kpmg.com/crreporting
| 5| 5
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What do these
It is a tough question because there is so much of While initiatives to standardize reporting approaches will
interest in these pages. Yet when I reviewed the data and carry on and should be encouraged, it is likely that the
asked myself this same question, I came up with three international reporting landscape will continue to be
important messages that I want to get across. Firstly, get fragmented and dynamic for the foreseeable future.
findings mean
ready for more reporting regulation because it is on the
Business leaders need to ensure their organizations are in
way. Secondly, be clear that reporting integration is the
touch with global reporting trends and in a good position
new normal and “non-financial” is the new financial.
to anticipate and respond to change. As demands for
Finally, remember that from here on in, it’s all about
disclosure continue to grow, firms need to ensure that
for business?
reporting your impact not just statistics.
they have up-to-date and efficient systems in place to
Get ready for more reporting regulation collect, analyze and disclose the necessary ESG
information and that they are able to convince regulators,
In the many interviews we conducted for this survey,
investors and others of the reliability of that information.
regulation emerged as a clear and recurrent theme. We
heard how governments and stock exchanges the world Reporting integration is the new normal and “non-
over - from Latin America to Japan, the US and the EU, to financial” is the new financial
This survey is arguably the most India and Taiwan - are bringing in new layers of regulation
comprehensive overview of There was a time when corporate responsibility
for environmental, social and governance (ESG)
information was considered strictly “non-financial” and
corporate responsibility reporting disclosure. We heard how voluntary guidelines are rapidly
not relevant to include in annual financial reports. The
transitioning into mandatory reporting requirements in
trends worldwide. It is packed full corporate responsibility report as we know it today was
many parts of the world.
of data, but what does all this born from those beliefs. But times are changing.
My message to business here, is to expect more of the
data actually mean? If business As our survey shows, more than three quarters of the
same. Countries that do not yet have reporting regulation
leaders have no time to continue are likely to introduce it. Those that have it are likely to
world’s largest 250 companies now include at least some
“non-financial” information in their annual financial
reading beyond this point, what strengthen it and to bring in new requirements for
reports. And where the largest firms lead, others
are the key points I want them to reporting on critical issues such as climate change and
inevitably follow. We can also see that some countries
human rights. Voluntary frameworks are likely to continue
take away from this report? to become compulsory. Levels of disclosure will likely
appear to be enthusiastically adopting the concept of
integrated financial and “non-financial” reporting, in many
continue to ratchet up.
cases nudged along by regulation or stock exchange
José Luis Blasco guidelines.
Global Head, KPMG
jblasco@kpmg.es
@JLBlasco_KPMG
linkedin.com/in/joseluisblasco/
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6 | www.kpmg.com/crreporting
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms ©of 2017
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Furthermore, the conventional lines between “financial” So increased dialogue and collaboration between the So my final message, is to go
and “non-financial” are not only beginning to blur, but in finance and sustainability functions – which are too often
beyond the statistics and explore
some examples are breaking down completely. It’s separate and siloed – will be critical.
important to note that the recommendations of the how to assess and communicate
It is all about impact not just statistics
Financial Stability Board’s Task Force on Climate-related impact. I believe there will be
Financial Disclosures (TCFD) apply to the disclosure of Traditional corporate responsibility reporting has focused significant benefits for those who
climate risk in annual financial reports not in corporate on reporting statistics such as how many cubic meters of
responsibility reports.
choose to lead in this field.
water a company has saved, how many tons of carbon it
has reduced or how many employees it has sent on I hope you enjoy reading this
I believe this is the start of a shift that will gather pace in
training programs. Such statistics increasingly lack real
the next few years. Environmental and social issues such
meaning without information on context and impact. The
survey and I would be delighted
as climate change, water scarcity and human rights will to hear your thoughts on it.
future of corporate responsibility reporting is all about
increasingly be seen as financial rather than non-financial
issues. Companies will be expected to be transparent not
communicating impact, not statistics. Please do feel free to contact me
only about their own performance on these topics, but Financial stakeholders - including investors, lenders and by email, Twitter or LinkedIn.
also about the financial risks and opportunities they face insurers – need to know what impacts your business is
from them and the likely effects on the business’s value having on society and the environment, and how this
Finally, may I extend my warmest
creation in both the short and long term. could impact your business performance in the future. thanks to the many KPMG
My message here is directed at Chief Financial Officers:
They want to see that you understand these impacts and professionals who contributed so
to understand what your business response is. For much hard work to the
the merging of financial and “non-financial” reporting will
example, is your company taking action that reduces
accelerate quickly in the next few years and it is the
risks, unlocks opportunities or builds capacity for future production of this survey and to
finance teams that will be expected to deliver the the experts at other organizations
value creation?
disclosures. The first step to effective disclosure is for
finance teams to gain a sound understanding of the In the responsible investment space, impact investing is a who so generously gave us their
material environmental and social issues that have growth area that will increase pressure on companies to time to provide insight on the
potential to affect the company’s financial performance. disclose their impacts on society in a measurable and findings. I am very grateful.
Most companies have resident experts who can help, comparable way.
namely their sustainability teams.
The UN’s Sustainable Development Goals (SDGs) are
fueling demands for impact data. As this survey
highlights, simply linking corporate responsibility activity
thematically to the SDGs is not enough. People want to
know how companies are contributing to achieving the
goals and what the actual impact of those positive
contributions is. Similarly, they want to know how
company activities are exacerbating the challenges the
SDGs seek to solve, and what that negative impact is in
real terms. It is not just civil society and NGOs that want
this information, we are seeing a number of large
institutional investors exploring how they can align their
investment approaches with the SDGs. Such investment
strategies will inevitably require impact disclosure from
business.
Base: 4,900 N100 companies
Source: The KPMG Survey of Corporate responsibility Reporting 2017
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International
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Quantitative global
trends in corporate
responsibility
reporting
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N100 companies continue to catch up with the G250

The underlying reporting rate for Growth in global CR reporting rates since 1993
N100 companies has risen by 2
100
percentage points since 2015: up
from 73 to 75 percent.1
This means that N100 companies continue to
catch up steadily with the G250. The G250
90 95%
93% 92% 93% 93%
Underlying
reporting rate has been stable at between 90 trend1
75%
80 83%
and 95 percent in the last four surveys.
There have been significant increases since
2015 in certain countries such as Mexico 70 73%
71% 72%
(+32 percentage points), New Zealand (+17
percentage points) and Taiwan (+11
60 64% 64%
percentage points) where new regulation has
driven reporting rates higher (see page 15).
50 53%
45%
40
41%
35%
30
20 24%
18% 18%
10
12%
0
1993 1996 1999 2002 2005 2008 2011 2013 2015 2017
1 The underlying trend of 75 percent applies when looking at the same N100 G250
sample of countries in 2015 and 2017. The overall N100 rate in 2017 is
72 percent due to the inclusion of 5 new countries with relatively low Base: 4,900 N100 companies and 250 G250 companies
reporting rates in the 2017 research. Source: KPMG Survey of Corporate Responsibility Reporting 2017
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Greater alignment of
reporting frameworks
will help continue
growth
The corporate responsibility
reporting rates demonstrated in
KPMG’s 2017 survey are very high and
are testament to the huge progress Ian Mackintosh
that has been made over the years. Chair, Corporate
Over the next five years, we expect to Reporting Dialogue
see greater alignment and consistency
among the various reporting standards and frameworks.
This should make reporting easier for companies and give
governments and regulators greater clarity when formulating
new, or reviewing existing, legislation. This should contribute
to continued growth in reporting rates in that same period.
The one quarter of N100 companies in this year’s survey that
are not reporting ignore sustainability at their peril. If they want
to remain in business in the long term, they need to start
thinking about it immediately. The first step is to start reporting
internally. By considering the issues we’re facing globally and
understanding how they could affect business models – both
positively and negatively – these companies can adapt
accordingly. If they don’t act, it’s unlikely they will remain in
business.
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Reporting in Mixed picture in Europe, Middle East & Africa continues

In Europe, the picture is also mixed. The underlying trend is one of growth (up 3 percentage points) but the divergence
between Western and Eastern Europe observed in 2015 remains.
Latin America The rate of reporting in Eastern Europe is still relatively low at 65 percent, despite an increase of 4 percentage points since
2015. Eastern European countries may be closing the gap on the rest of the region but are doing so slowly. Clearly, the
impact of the European Directive on Non-Financial Reporting has yet to be fully felt.
grows, Eastern
There has been a slight decline of 1 percentage point in the Middle East & Africa where reporting rates are traditionally
low. Low rates of reporting in Angola, Oman and Israel are offsetting high rates in South Africa and Nigeria.
Corporate responsibility reporting rates by region
Europe yet to
catch up 83% 78% 77% 52%
CR reporting in the Americas

region has risen by an impressive
6 percentage points in the last Middle East
Americas Asia Pacific Europe
two years. & Africa
As a result, it has overtaken the Asia Pacific 2017 2
region to become the leading region for CR

reporting globally. This growth has come
100
predominantly from Mexico where reporting 79%
76% 73% 77% 74%
rates have jumped from 58 percent in 2015 80 69% 71% 71%
to 90 percent in 2017, driven by regulatory 61%
60 49% 54% 53%
change. This has been complemented by
growth of 5 percentage points in Colombia 40
and the US and by already-high rates in
Brazil. 20
CR reporting rates in Asia Pacific have 0

stabilized following a surge of 8 percentage 2011 2013 2015
points between 2013 and 2015. Several Americas Asia Pacific Europe Middle East & Africa
countries with the highest CR reporting
rates in the world, such as Japan, India,
Malaysia and Taiwan are in the Asia Source: KPMG Survey of Corporate Responsibility Reporting 2017
Pacific region. 2 The underlying trends of 78 percent for Asia Pacific and 77 percent for Europe apply when looking at the same sample of countries in both 2015 and 2017. The overall Asia Pacific regional rate
in 2017 is 77 percent and the overall European regional rate in 2017 is 73 percent due to the inclusion of new countries with relatively low reporting rates in the 2017 research.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the
© 2017 KPMGKPMG network ofCooperative
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(“KPMG affiliated withaKPMG
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Full effect of EU Directive will be seen

in 2019 or 2020
The EU Non-Financial Reporting Directive (which requires large companies in the EU to
disclose social, environmental and diversity information) is the most significant EU-wide legislative
initiative to promote corporate responsibility reporting. It has likely already had some effect on CR
reporting rates in the EU, but it is difficult to say what the impact has been so far because the
process of transposing the Directive into the national laws of EU countries has been a bumpy one.
Nearly half the EU Member States missed the December 2016 deadline for transposition.
Olivier
While the Directive provides high level guidance, Member States have considerable flexibility in
terms of how to apply it in their national laws. This means that states that already had existing CR
Boutellis-Taft
reporting legislation – such as the UK, Germany and Sweden – have been able to shape the Chief Executive,
requirements of the Directive according to those existing regulations, thus ensuring some Accountancy
continuity for businesses. However, businesses in the many states that lacked existing regulation Europe
have had to play a waiting game to see how the Directive would be applied in national law.
We believe that the real impact of the Directive will start to become evident during 2019 or even 2020, following these
delays in transposition and a transitional period as companies become familiar with the legislation and introduce new
internal reporting systems or adapt their existing ones.
Despite the delays and teething troubles, the Directive is a key step to increasing the importance of CR reporting,
particularly in those EU Member States where no such requirements previously existed. However, the true benefits of
non-financial reporting will be felt only when it is properly integrated with financial reporting and not treated as a separate
exercise by a different silo within the organization. Reporting is only an instrument; the benefits will come once CR
objectives and practices are fully embedded in the business, which reporting can demonstrate but cannot achieve on its
own.
Although we welcome the flexibility that the Directive allows governments in driving the adoption of CR reporting, we
believe we should be moving towards an international framework that would both streamline the process for new
reporters and also increase consistency between reports. In the meantime, it is crucial for businesses to focus their
reporting on the CR issues of prime importance to them and their stakeholders, and ensure these issues are considered at
the top level of management. This includes the identification of the key risks and strategies to minimize these risks, and to
maximize opportunities. This, in turn, will lead to better returns for investors.
We are already seeing a strong correlation of increased returns for investors from companies that truly embrace CR issues
and the EU Directive should result in an increase in reporting that further demonstrates this link. Once investors are
convinced of the benefits of embedding reporting into the organization at all levels then we will see a further surge in CR
reporting.
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services.
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firmauthority
has any to
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obligatetoorobligate
bind KPMG
or bind
International
KPMG International
or any other
or any
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have any have
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memberAll rights
firm. reserved.
All
rights reserved.
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CR reporting rates: North America

The view from Latin America vs Latin America
A number of factors are driving CR reporting in Latin

90
America. Firstly, the region is rich in natural resources and 88%
companies need a social license-to-operate in order to access these
resources. Many such companies build infrastructure like hospitals
and schools in order to enhance their relationships with local 85 84%
communities and this in turn has led to a culture of CR reporting as
companies seek to demonstrate their contributions to society.
81%
Secondly, Latin American companies can face high non-tariff trade Ricardo Zibas
barriers on exports such as demands from foreign governments 80
Director,
and consumers for environmental or human rights certification and, Sustainability
increasingly, fair trade certification. Reporting helps to overcome Services, KPMG in
such barriers. Brazil 74%
75
Thirdly, CR reporting in Latin America has increased as companies
attempt to retain or regain public trust in the wake of high profile
corporate scandals, such as the Samarco dam collapse in 2015 –
the worst environmental disaster in Brazilian history. 70
These trends are combining with new developments in government regulation, stock
exchange requirements and stakeholder pressure to drive high levels of reporting. In order to
achieve even higher levels across the region in the next few years, more mandatory and 65
properly-enforced government or industry regulation will be needed. Given recent trends,
I expect this to take place. North America Latin America
2015 2017
Base: 700 N100 companies in the Americas

Source: KPMG Survey of Corporate Responsibility Reporting 2017
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CR reporting rates: Western Europe

vs Eastern Europe The view from Eastern
Europe
90
82%3
79% Many businesses in Eastern Europe
80 are still focused on the financial bottom line
rather than the triple bottom line - it’s fair to
70 65% say that a culture of sustainability is yet to
61% properly take hold across the region. In
60 Romania specifically, much of the 6
percentage point reporting growth observed
50 since 2015 has come as a result of a Gheorghita
commitment to transparency by Diaconu
40 multinationals that operate in the country.
Director,
30 The EU Directive on Non-Financial Reporting Sustainability
was transposed into Romanian law last year. Services,
20 Despite this, many companies in Romania KPMG in Romania
and across Eastern Europe are still just
10 beginning to understand the topic and build
their capacity to respond.
0 However, I expect to see steady growth in CR reporting in Eastern Europe
Western Eastern over the next few years and improving quality as regulatory requirements,
market pressure and increasing awareness take effect.
Europe Europe
2015 2017
Base: 2,400 N100 companies in Europe

3 Theunderlying trend of 82 percent applies when looking at the same sample of
countries in 2015 and 2017. The overall Western Europe rate in 2017 is 75 percent
due to the inclusion of 3 new countries with relatively low reporting rates in the
2017 research.
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Regulation, stock exchanges and investor pressure drive

national reporting rates
Greatest growth seen in Mexico, New Zealand and Taiwan
Governments, regulators and stock exchanges continue to play a key role in driving up CR reporting rates around the world. In the three countries which have experienced the greatest
increases in reporting since 2015 - Mexico (+32 percentage points), New Zealand (+17 percentage points) and Taiwan (+11 percentage points) - a mix of new regulation, stock exchange
requirements and investor pressure have been instrumental in increasing reporting.
There has also been strong growth in CR reporting across a number of EU countries. Finland, Ireland, Greece and the Czech Republic have all recorded increases of 8 percentage points
between 2015 and 2017. While the full effect of the EU Non-Financial Reporting Directive is not expected to be felt for another two years or so, it is possible that awareness of the
Directive has helped to boost reporting rates in some EU countries. Under the Directive, companies that do not disclose their social, environmental and Board diversity policies can be
named publicly. This risk of reputational damage may already have convinced some non-reporters to start reporting with more expected to follow suit.
CR reporting has also increased by 8 percentage points in the United Arab Emirates (UAE) since 2015.
National rates of CR reporting, 2015 and 2017

Countries with CR reporting rate higher than 90%
UK Japan India Malaysia France Denmark South Africa US Mexico
98% 99% 97% 99% 100% 99% 99% 97% 97% 94% 94% 94% 95% 92% 87% 92% 58% 90%
2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017
Presence of CR reporting Government Mandatory Voluntary Stock Exchange Mandatory Voluntary

regulation in the country

Note: 2015 CR reporting rate restated for South Africa
Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017
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National rates of CR reporting, 2015 and 2017
Countries with CR reporting rate higher than the global average (72%-89%)
Norway Taiwan Sweden Nigeria Spain Brazil Singapore Canada Chile
90% 89% 77% 88% 87% 88% 85% 88% 84% 87% 85% 85% 84% 84% 81% 84% 80% 83%
2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017
The
Colombia Switzerland Finland Portugal Italy Ireland Hungary Australia
Netherlands
78% 83% 80% 82% 75% 82% 74% 82% 81% 80% 79% 80% 70% 78% 84% 77% 81% 77%
2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017
South
Romania Russia Germany
Korea
68% 74% 74% 73% 66% 73% 69% 73%
2015 2017 2015 2017 2015 2017 2015 2017
Countries with CR reporting rate lower than the global average (less than 72%)
New Thailand Peru Belgium Austria Poland Luxembourg Slovakia Greece

Zealand
52% 69% 67% 69% 66% 59% 62% 62% 54% 59% 59% 48% 55% 46% 54%
2015 2017 2017 2015 2017 2015 2017 2017 2015 2017 2017 2015 2017 2015 2017
Czech
Turkey UAE Angola Oman Israel Kazakhstan Cyprus
Republic
43% 51% 50% 36% 44% 34% 32% 37% 30% 28% 26% 23% 25% 13%
2015 2017 2017 2015 2017 2015 2017 2015 2017 2015 2017 2015 2017 2017
Presence of CR reporting Government Mandatory Voluntary Stock Exchange Mandatory Voluntary

regulation in the country

Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017
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Foreign investment helps to New Zealand Stock Exchange

increase CR reporting Code set to increase both
in Mexico quantity and quality of CR
In Mexico, a perfect storm of regulation,
reporting
stock exchange innovation and investor pressure
The growth of CR reporting in New Zealand
has driven a leap in reporting rates. In 2013, the
over the last two years can be attributed to
government passed the General Law on Climate
Jesús González increased consumer awareness and investor Erica Miles
Change which requires companies to report on
pressure, as well as a broader appreciation among
their carbon emissions. This was rolled out
Partner, businesses that non-financial risk management is Director,
between 2015 and 2017. Mexico’s stock exchange
Sustainability key to long-term value protection and creation. Sustainability
(Bolsa Mexicana de Valores) has also introduced
Services, KPMG in Services, KPMG in
sustainability indices, which many companies are For the moment, the quality of CR reporting by
Mexico New Zealand
keen to join to gain new investors and access new New Zealand businesses is often lacking in balance,
capital. In order to join, companies must produce objectivity and transparency. Over the next two
sustainability reports. years, the Corporate Governance Code recently introduced by the New
Another important element is the level of foreign investment in the Zealand Exchange (NZX) will likely act as a catalyst for better business
Mexican economy. The high levels of growth seen in Mexico since the reporting by raising the bar on what is expected. The onset of this more
liberalization of the economy in the late 1980s and early 1990s means holistic approach will hopefully see box-ticking compliance consigned to
that its companies have long been targets for foreign investment. Foreign the side lines and frameworks such as Integrated Reporting and GRI being
investors increasingly ask for sustainability reporting. Taken together, used as critical business tools to understand, define and enhance corporate
these three factors have created a new environment where sustainability value.
reporting has flourished.
It’s encouraging that so many large companies in Mexico are adopting
sustainability as a long-term business strategy. However, the real
challenge lies with convincing Mexico’s small and medium firms, 99
percent of all companies in the country, that sustainability is a must for
long-term profit generation and risk management.
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Stock exchange pushes up CR CR reporting gains momentum

reporting in Taiwan in the UAE
CR reporting in Taiwan has increased over Although the UAE is one of the few
the last two years due to new mandatory reporting countries in the survey where less than half the top
regulation and investor principles from the Taiwan 100 companies currently report on CR, increasing
Stock Exchange. In 2014, the exchange required interest in sustainability is driving up
mandatory CR reporting by companies in the reporting rates.
chemical, food, finance and insurance sectors, as
‘Sustainable environment and infrastructure’ is one
well as all businesses with paid-in capital of T$10 Niven Huang Hanife Ymer
of the key pillars of the UAE Vision 2021, the
billion. At the end of 2015, this was extended to
General Manager, government’s long-term strategy for socio- Director in charge,
include companies with paid-in capital of
Sustainability economic development. What’s more, 2017 is the Sustainability
T$5 billion.
Services, KPMG in 'Year of Giving' in the UAE, a government initiative Services, KPMG in
Last year, the exchange also published new Taiwan focusing on three key pillars – Corporate Social the Lower Gulf
stewardship principles for institutional investors, Responsibility, Volunteering, and Serving the
which advise investors on how to fulfill their Nation. Given the increased interest in
ownership responsibilities and encourage them to sustainability within the region, I would expect CR
disclose how they have applied the principles. reporting to become the norm for larger companies
within 5 years.
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Future reporting regulation to Stock exchanges transitioning

be shaped by crises and from voluntary guidelines to
emerging issues mandatory reporting
Historically, new regulation has come out of
requirements
crises or emerging issues. The future of CR
There are many factors driving corporate
reporting regulation will evolve to fit new issues
responsibility reporting requirements in stock
and boost the quality of implementation on existing
Cornis van exchanges around the world. In developing Anthony Miller
issues. Increasingly specific requirements will be
countries, for example, CR reporting is seen as a
necessary to facilitate implementation of economic der Lugt proxy for good governance, which is critical for Corporate Social
instruments such as trading schemes or carbon
Senior Research attracting foreign investment. Elsewhere, Responsibility
taxes, compelling companies to disclose more
Fellow, Centre for investors and governments are increasingly Coordinator,
reliable and accurate information. We might also
Corporate concerned with how companies are building and Sustainable Stock
see requirements for more sophisticated
Governance in Africa, protecting long-term value. While these and other Exchanges Initiative,
disclosure related to tax evasion, for example
Stellenbosch drivers increase reporting rates, the reporting United Nations
country-by-country breakdown of tax payments.
University Business debate among stock exchanges is now Conference on Trade
In emerging markets there is particular interest in School largely over. and Development
socio-economic impact, which will drive further
Among the 65 stock exchanges that have
disclosure regulation around impact assessment
partnered with the Sustainable Stock Exchanges initiative, there is now
and valuation. Investors understand the business
widespread acceptance of the benefits of voluntary corporate responsibility
logic that underlines the concept of treating
reporting guidance. We are also seeing some exchanges and regulators
environmental, social and governance (ESG) issues as material. But many starting to transition to mandatory reporting requirements, which is a trend
companies fail to report business logic, true value creation and materiality we expect to continue over the long term. As a result, companies that are
effectively. Some leading stock exchanges, notably from emerging not already producing sustainability reports should consider doing so, as
markets, are starting to mandate disclosure that requires not only this is fast becoming a mainstream expectation in most markets around
reporting numbers but also better description of the business logic and the world.
sustainability behind the numbers.
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Lagging sectors CR reporting rates by sector
Oil & Gas 81%
gain ground
76%
Chemicals 81%
75%
Mining 80%
83%
For the first time in the history of this survey, more than 60 Automotive 79%
percent of companies across all industry sectors are reporting 77%
on CR. Technology, Media & Telecommunications 79%
The four lagging sectors identified in KPMG’s 2015 survey – Healthcare; Transport & 79%
Leisure; Industrials, Manufacturing & Metals; and Retail – have all shown increases Forestry & Paper 77%
in CR reporting in 2017. The most significant growth has come from the Healthcare 73%
and Chemicals sectors which have seen increases of 8 and 6 percentage points,
respectively. Healthcare 76%
68%
While there has been an increase in CR reporting from businesses in the Retail
sector since 2015, the sector still has some way to go to catch up with others. Utilities 74%
81%
Food & Beverages 73%

As in previous years, sectors with high 76%
environmental and social impacts - such Financial Services 71%
as Oil & Gas and Mining - typically 75%
have high CR reporting rates Transport & Leisure 70%
76%
2
Personal & Household Goods 70%
68%
__ More than two thirds of companies in

all sectors except Retail now report on
Construction & Materials 69%
72%
3 their CR performance Industrials, Manufacturing & Metals
Retail 63%
68%
67%
58% 2017 2015

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More companies include CR data in annual

financial reports
The trend for large companies to G250 companies that include CR
Companies that include CR information include CR information in their information in annual financial
in annual financial reports annual financial reports reports, 2011-2015
continues to grow.
The vast majority (78 percent) of the world’s
2015 2017 top companies (G250) now do this, indicating
that they believe CR data is relevant for their
investors. The practice has shown
N100 remarkable growth in recent years: in
56% 60% 78%

4 KPMG’s 2011 survey only a minority 44
percent of G250 companies included CR
data in their annual reports.
Among the N100, the underlying trend is
also one of growth, with the rate of
companies including CR data in their annual
reports up to 60 percent in 2017.
65%
G250 There has been a particularly significant
increase in the number of US N100
55%
65% 78%
companies integrating CR information into
their financial reporting – 81 of the top 100
US companies now do this compared with
only 30 just two years ago in 2015. (For
more on this trend see page 23). 44%
Base: 4,900 N100 companies and 250 G250 companies

2011 2013 2015 2017
4 The underlying trend of 60 percent applies when looking at the same sample of countries in 2015 and
2017. The overall N100 rate in 2017 is 57 percent due to the inclusion of 5 new countries with relatively Base: 250 G250 companies
low reporting rates in the 2017 research. Source: KPMG Survey of Corporate Responsibility
Reporting 2017
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Ten countries with the highest rates of CR information in annual financial reports
81% 80%
Sweden
Norway
10
9
92% 3 6 86%
UK Denmark
7
8 88%
Taiwan
83% 1
5
France
81% 2
93%
US Malaysia
98%
4 India
91%
South
Base: 4,900 N100 companies Africa
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Three key factors encouraging data integration in US reporting

In the US, three main factors have driven growth in CR reporting and the attendant increase in
companies including CR information in their annual reports. The most significant has been investor
and shareholder interest in sustainability, which is forcing companies who have not previously
reported to start practicing this kind of disclosure.
Secondly, companies are also required to carry out climate change-related disclosure in Securities and
Exchange Commission (SEC) filings. More companies are complying with this, particularly as the risk
from climate change becomes ever clearer.
Katherine Blue
Lastly, the influential Sustainability Accounting Standards Board (SASB) publishes industry-specific
Sustainability Accounting Standards that advise what CR disclosures organizations should include in Partner, Sustainability
their mandatory financial SEC filings. Taken together, these factors have driven higher reporting rates Services, KPMG in
and, in particular, have significantly increased rates of companies including CR information in their the US
annual reports.
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Integrated Reporting takes off in certain countries

Big rises in Japan, Brazil, Mexico and Spain Actual number of Integrated Reports: top ten countries
The number of companies that specifically label their reports

as “Integrated” is growing slowly but steadily.
88
+2 90
+21 +9 -1
In 2017,
14%
42
36
27 27 26
21
South Africa Japan Spain The Netherlands

of reporting companies in both the G250 and N100 groups
do this. In 2015, the rates were:
+16 +16 +7 +6
11% 15%
of N100 reporting
companies
of G250 reporting
companies
6
Brazil
22
5
Mexico
21
10
South Korea
17
9
UK
15
Around two thirds of these also reference the International

+2 +5
Integrated Reporting Council (IIRC) framework for integrated
reporting. 13 15 15
10
2015
Despite the modest global growth, there have been
significant increases in Integrated Reporting in four countries Sweden Poland 2017
in particular: Japan (+21 percentage points), Brazil and Base: 4,900 N100 companies
Mexico (both +16 percentage points) and Spain (+9 Source: KPMG Survey of Corporate Responsibility Reporting 2017
percentage points). Note: 2015 Integrated reporting rate restated for South Africa
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©
© 2017
2017 KPMG
KPMG International
Swiss entity.
entity. Member
Member firms
firms of
of the
the KPMG
KPMG network
independent firms
firms are
are affiliated
affiliated with
with KPMG
KPMG International.
International. KPMG
KPMG International
provides nono client
client services.
No
No member
member firm
firm has
has any
any authority
authority to
to obligate
obligate or
or bind
bind KPMG
KPMG International
International or
or any
any other
other member
member firm
firm third
third parties,
parties, nor
nor does
does KPMG
KPMG International
International have
have anyany such
such authority
authority to
to obligate
obligate or
or bind
bind any
any member
member firm.
firm. All
All rights
rights reserved.
reserved.
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Integrated Reporting seen Governance reforms drive

as a proxy for good Integrated Reporting in Japan
governance
Several recent initiatives from the
government, the financial regulator and the
Both Brazil and Mexico are keen to
stock exchange in Japan have all helped to
attract foreign investment, and Integrated
increase rates of Integrated Reporting in the
Reporting is seen as a proxy for the good
country. In 2014, the Japanese Ministry of
corporate governance that is crucial for
Economy, Trade and Industry (METI) produced a
attracting these investors. Richard Howitt Yoshitake
report on competitiveness and incentives for
Integrated Reporting has always attracted keen Chief Executive sustainable growth (known as the Ito Review). Funakoshi
interest in Brazil – many Brazilian companies Officer, This report, among other recommendations, Partner,
joined the first IIRC Pilot Programme along with International promoted two-way dialogue between Sustainability
representatives from the Brazilian Development Integrated companies and investors on the topic of Services, KPMG in
Bank. This, combined with the fact that Brazilian Reporting Council sustainable growth. Integrated Reporting is Japan
companies have traditionally been at the seen as a useful tool for such dialogue.
forefront of CR reporting trends accounts for the Also in 2014, the Japanese Financial Services Agency (FSA), the
increasing popularity of Integrated Reporting in authority responsible for ensuring the stability of the Japanese financial
the country. Whilst Integrated system, published a Stewardship Code for institutional investors that
Reporting is a mainstream approach to reporting, we are seeing in many reminds investors of their fiduciary duty and promotes sustainable
countries that CR reporting is often a precursor on the journey to real growth within the Japanese economy. The code stipulates that
integration of information. investors should encourage their investee companies to practice
Integrated Reporting. The following year in 2015, the Tokyo Stock
In Mexico, the rise in Integrated Reporting is being driven partly by the
Exchange published its Corporate Governance Code, which also
overall increase in CR reporting, with integrated reports seen as best
encourages companies to adopt Integrated Reporting.
practice for making sustainability information strategic, relevant and part
of the broad story of value creation. Investors are putting more pressure
on companies to explain how CR efforts benefit the business, which
helps to increase demand for Integrated Reporting. It helps reporting to
become a tool for understanding and quantifying long-term value rather
than a box-ticking exercise to satisfy governments and regulators.
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Assurance of CR data continues steady growth

The number of companies investing in third-party assurance of their CR reporting has grown steadily since 2005.
Assurance of CR data is now accepted standard practice among G250 companies with more than two thirds (67 percent) of these companies seeking
assurance.
While assurance rates among the N100 are lower (currently 45 percent), KPMG expects a majority of N100 companies to have their CR data assured
within the next two to five years if recent trends continue.
The data suggests that assurance rates increase most rapidly in countries where high rates of CR reporting have been achieved. For example, between
2015 and 2017 there was a 14 percentage point increase in assurance of CR data in Taiwan and Japan, and a 12 percentage point increase in the US – all
of which have high CR reporting rates of 88 percent or above.
Growth in independent assurance of CR information

67%
63%
59%
46%
40%
30%
2005 2008 2011 2013 2015 2017
33%
39% 38% 38% 42% 45%
N100 G250
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member www.kpmg.com/crreporting | 26
No
firmmember
has any firm has any
authority authorityortobind
to obligate obligate
bind KPMG International or any other
or any other member firmmember firm third
third parties, parties,
nor does KPMGnor International
does KPMG International have
have any such any such
authority authorityortobind
to obligate obligate or bind any
any member firm.member firm.
All rights All rights reserved.
reserved.
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Paris Agreement and Financial stakeholders

investor pressure drive recognize the role
demand for assurance in of “non-financial”
Japan data in long-term
value creation
Leading Japanese companies
have set a trend for investing in
Investors and other financial
assurance of CR data in recent years
Kazuhiko Saito stakeholders are increasingly Bill O’Mara
and their example has encouraged
aware that environmental, social
others to follow suit. Global Head of
Managing Partner, and governance (ESG) issues,
Other drivers for assurance include Sustainability previously considered “non- Audit, KPMG
pressure to demonstrate that GHG Services, KPMG financial”, are relevant to the International
emissions data is reliable and accurate. in Japan financial performance and long-
The Paris Agreement has had a term value creation potential of
significant effect in Japan, with many a business.
companies seeking to prove that they have reduced GHG
As a result, we are seeing greater demand for assurance,
emissions and are on a pathway consistent with the 2˚C
which promotes reliability in this information. I believe the
scenario outlined in the agreement.
growing awareness and engagement of investors, audit
There has also been serious investor pressure. Japan’s committees and management is one of the key drivers
Government Pension Investment Fund (GPIF), the world’s behind the growth in assurance of corporate responsibility
largest fund, recently signed the Principles for Responsible data. Recent developments such as the reporting
Investment (PRI) which means it is demanding more reliable recommendations of the Task Force on Climate-related
ESG information from its investee companies. The fact that Financial Disclosures are likely to reinforce this growth
assurance of CR data helps to achieve or is required for listing trend.
on sustainable stock indexes, such as the Dow Jones
Sustainability Index, has also helped to drive up assurance
rates in Japan.
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GRI remains the most popular framework

for CR reporting
The majority of N100 (74 percent) and G250 companies (89 percent) are using some
kind of guidance or framework for their reporting. The GRI framework is the most GRI Standards
commonly used, with 63 percent of N100 reports and 75 percent of G250 reports
applying it. Meanwhile, 13 percent of N100 and 12 percent of G250 companies are mirror increasing
using stock exchange guidelines. sophistication
One in ten (N100) companies using GRI has reported in line with the new standards, of CR reporting
introduced at the end of 2016.
It’s pleasing to see that
Use of GRI Guidelines vs GRI Standards GRI remains the most widely
adopted sustainability
reporting framework according Tim Mohin
GRI G3
2% to this year’s survey results.
The number of businesses
that have already adopted the
Chief Executive, GRI
GRI Standards is also

encouraging.
The evolution of GRI’s reporting guidelines into modular
GRI G4
88% standards mirrors the ongoing sophistication of
sustainability reporting. It also means the GRI Standards
are more suitable for incorporation into government and
market regulator reporting policies and we have seen
references in around 100 policies worldwide from
countries, regions and stock exchanges.
GRI
Standards 10%
Base: 2,230 N100 companies that apply the GRI Framework

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Acknowledging
the financial risks
of climate change
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Three quarters of companies worldwide yet to

acknowledge climate change as a financial risk
KPMG’s analysts studied the annual financial reports of 4,900 companies worldwide to understand how many acknowledge that
climate change poses a financial risk to their business.
They found that only 28 percent of these companies currently acknowledge the financial risk of climate change in their annual reports, meaning that almost three quarters (72 percent) do not.
Among the world’s 250 largest companies (G250), a higher 48 percent acknowledge the risk, although this global rate conceals some significant differences between countries (see page 34).
Companies that acknowledge the financial risk of climate change

in their annual reports Task Force increases pressure on companies
to disclose financial risks of climate change
N100 G250 In 2015, the Financial Stability Board highlighted climate change as a risk
to the stability of the global financial system and set up the Task Force
on Climate-related Financial Disclosures (TCFD). The Task Force has
brought together companies that prepare financial data and users of that
data (investors, lenders and insurers) to recommend how companies
should disclose the financial risks of climate change. These
28% Yes
48% Yes
recommendations focus on the disclosure of physical risks from
extreme weather such as storms and droughts, and commercial risks
related to the global transition to a lower carbon economy. The
recommendations were submitted to the G20 in July 2017.
72% 52%
As a result, pressure is growing on companies to improve their
disclosure of climate-related financial risk. UK investment house Aviva
Investors, for example, has announced that it will vote against the
annual reports and accounts of investee companies that do not report in
No No line with the Task Force’s recommendations.
For more on the TCFD see: www.fsb-tcfd.org
Base: 4,900 N100 companies and 250 G250 companies

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Very few companies quantify climate

risks or model their financial impacts
Of those companies that do acknowledge climate change as a financial risk in their financial
reporting, a relatively high proportion of both the N100 (63 percent) and G250 (76 percent) provide
some narrative description of the potential impacts. Very few, however, are currently quantifying
the potential impact of those risks in financial terms or modeling it using scenario analysis or
other methodologies as the TCFD recommends.
Companies describing, quantifying or modeling climate risk in financial reports N100 G250
76%
63%
33%
18%
2% 2% 2% 3%
Acknowledge financial risk of climate

Provide a narrative description of Quantify potential risks in financial Model potential impacts using
change but do not describe the
potential impacts terms scenario analysis
potential impacts
Base: 1,386 N100 companies & 119 G250 companies that acknowledge climate change as a financial risk in their annual report
Note: Numbers do not add up to exactly 100 due to rounding
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Swiss KPMGMember
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of the KPMG(“KPMG
networkInternational”),
of independent a Swiss
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with www.kpmg.com/crreporting | 31
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KPMG or International.
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What is driving acknowledgement of

climate risk in the leading countries?
Taiwan, France, South Africa, US and Canada lead the world
There are five countries where a majority of the top 100 companies already acknowledge climate change Climate risk
as a financial risk in their annual financial reports. They are: Taiwan (88 companies), France (76 companies), disclosure likely to
South Africa (61 companies), US (53 companies) and Canada (52 companies).
increase further in
Taiwan: the Taiwanese Stock Exchange (TWSE) listing requirements and newly introduced Canada
Stewardship Principles for Institutional Investors have likely contributed to the high rates in
Taiwan. I am not surprised that
more than half of the Canadian
France: a 2015 amendment to the Energy Transition for Green Growth law has required companies included in this year’s
investors to disclose how they integrate climate considerations into their investment policies, survey acknowledge climate Bill Murphy
their climate-related financial risk, the greenhouse gas (GHG) implications of their investments change as a financial risk in their National Leader,
and how they contribute to meeting French and international climate objectives. This has annual reports. Many of Canada’s Sustainability
likely had a knock-on effect on the number of French companies acknowledging climate risk largest companies operate in the Services, KPMG
in their financial reporting. extractive and financial services in Canada
sectors, where physical and
South Africa: climate change impacts have been high on the business agenda as severe transitional climate-related risks have become increasingly
droughts have affected the country in recent years. The South African government is also important strategic considerations. Additionally, many of
consulting on introducing a carbon tax as part of its response to The Paris Agreement, which – Canada’s largest institutional investors have shown
if passed – is expected to impact companies in the Mining, Utilities and Chemicals sectors in support for the TCFD recommendations.
particular. Going forward, climate risk disclosures will expand further
due to the increasing expectations of securities regulators,
Canada: many of Canada’s largest companies operate in climate impacted sectors such as Oil the investor community and other stakeholders. Report
& Gas, Mining and Forestry & Paper. Also, many of the country’s largest pension funds have issuers will need to provide more consistent information
lent their support to the TCFD recommendations. within their sectors and, in particular, align disclosures
with the TCFD recommendations. I also expect to see
US: US Securities & Exchange Commission (SEC) regulation requires disclosure related to more forward-looking information and, especially for
climate change in SEC filings. US corporate culture is also focused on efficient management sectors that are significantly exposed to physical and
and avoidance of risk in order to prevent charges of negligence and potential litigation. Some transitional risks, the inclusion of scenario analysis
of the US’s largest investors are also members of the TCFD, so there may also be an informal regarding the potential impacts of climate change on their
influence at play here. products, revenues and profitability.
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Mixed picture for TCFD priority

sectors among the N100
The TCFD recommendations Sectoral view: N100 companies acknowledging
provide specific supplemental
climate risk in financial reports
guidance for certain players in the
Financial Services sector, namely
banks, insurance companies, asset Forestry & Paper 44%
owners and asset managers.
Supplemental guidance has also Chemicals 43%
been provided for four other sectors
considered potentially most Mining 40%
affected by climate change and the
transition to a lower carbon Oil & Gas 39%
economy, namely Energy;
Utilities 38%
Transport, Materials & Buildings;
Agriculture, Food & Forest Products.
Automotive 38%
When looking at N100 companies,
this survey shows that Forestry, Technology, Media & Telecommunications 35%
Food, Oil & Gas, Utilities and
Automotive sectors (which broadly Food & Beverages 32%
correspond to the TCFD priority
sectors) have a higher than average Construction & Materials 25%
rate of acknowledging climate risk. Industrials, Manufacturing
On the other hand, Financial 24%
& Metals
Services, Construction & Materials
and Transport & Leisure have a Financial Services 24%
lower than average rate. It should
Personal & Household Goods 23%
be noted, however, that there are
currently no industry sectors in
Retail 23%
which a majority of N100
companies acknowledge the
Transport & Leisure 20%
financial risk of climate change.
Healthcare 14%

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33 | www.kpmg.com/crreporting
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network © 2017
of independent
KPMG International
firms areCooperative
affiliated with
(“KPMG
KPMGInternational”),
International. KPMG
a Swiss
International
entity. Member
providesfirmsnoofclient
the KPMG
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network of www.kpmg.com/crreporting | 33
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor
independent
does KPMG firms
International
are affiliated
havewithanyKPMG
such authority
International.
to obligate
bind any member
providesfirm.
no client
All rights
services.
reserved.
No member
firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG
International have any such authority to obligate or bind any member firm. All rights reserved.
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Climate risk reporting: the world’s largest companies

(G250)
There are significant differences between countries
National view: G250 companies acknowledging
The world’s 250 largest companies can reasonably be expected to lead
the way when it comes to acknowledging and disclosing the financial climate change as a financial risk
risks of climate change to their business.
While the survey shows that less than half the G250 (48 percent)
currently acknowledge the risk, deeper analysis reveals significant
differences between companies according to where they are
90% France
headquartered.
For example, in France, Germany and the UK, a majority of G250
companies do acknowledge the financial risks of climate change in their
reporting. Just under half the G250 companies based in the US and Japan
do so. Lower rates of climate risk acknowledgment in other countries and
61% Germany
regions reduce the overall global rate.
60% UK
49% US
48% Japan
Base: 250 G250 companies

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Sectoral view changes when Sectoral view: G250 companies acknowledging climate change as a financial risk
looking at the world’s largest
companies
When looking specifically at the world’s
250 largest companies (G250) the sectoral
view changes significantly. Around two
67%
Retail
65%
Oil & Gas
54%
Utilities
thirds of the world’s largest Retail firms
(67 percent) are acknowledging climate
risk in their financial reporting, whereas
this sector lags in the N100 sample. This
may be because world-leading retailers
are more likely to be aware of the
potential impact of climate change on
their complex global supply chains.
53%
Automotive
47%
Technology, Media &
46%
Industrials,
The Oil & Gas sector has a relatively high Telecommunications Manufacturing & Metals
rate of climate risk acknowledgement in
both the G250 and N100 research
samples. This might be expected given
that investors and campaigners have been
putting oil and gas companies under
pressure to disclose their climate risks for
many years now.
36%
Financial Services
25%
Healthcare
It is notable that even the world’s largest
Financial Services firms have a relatively
low rate of climate risk acknowledgement Source: KPMG Survey of Corporate Responsibility Reporting 2017
(36 percent). Note: Graphic shows only sectors with 10 or more G250 companies
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms
© 2017of the
KPMG
KPMG International
network ofCooperative
independent(“KPMG
firms are
International”),
affiliated withaKPMG
Swiss International.
entity. MemberKPMG
firmsInternational
of the KPMG provides
networknoofclient
independent
services.firms are www.kpmg.com/crreporting | 35
No member firm has any authority to obligate or bind KPMG International or any other member
affiliated
firm third
with parties,
KPMG International.
nor does KPMG
KPMGInternational
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or bind KPMG
International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
All rights reserved.
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Climate risk disclosure puts climate change on the Chief Financial

Officer’s agenda
In the coming years, we can expect to see a sharp increase in reporting on the financial risks from
climate change, building on the rates demonstrated in this year’s survey. Climate change is introducing
greater risk and uncertainty into the financial system, both by causing physical damage to companies’ assets,
infrastructure and supply chains, and by catalyzing market transformations that threaten to make some
traditional business models obsolete and create opportunities for others. As a result, investors and central
banks are pushing for greater disclosure. The Financial Stability Board’s Task Force on Climate-related
Financial Disclosures (TCFD) has also been influential in driving this and its recommendations of July 2017 Wim Bartels
will likely become the de facto framework for reporting of this kind in coming years.
Member of the TCFD
Climate-related risk disclosure is very different from reporting carbon emissions or environmental impacts. and Partner, Corporate
It’s about turning the telescope around, understanding the impact of a changing climate on the company and Reporting, KPMG in the
asking searching questions. Does the company need to move its operations? Is its supply chain vulnerable to Netherlands
weather events? Will it be it be able to take out insurance in future? Should it change its business model
entirely?
This change in reporting approach will also require a change in roles and responsibilities. Traditionally, thinking about climate change has
been the function of corporate responsibility or sustainability teams, but now the responsibility needs to sit with the executive who has the
best understanding of a company’s financial risks and opportunities – namely the CFO.
For companies that have just begun the process of reporting on climate-related financial risks, or have not yet started at all, a qualitative
approach is a good foundation and the TCFD’s guidelines are helpful here. Companies should bring together the main stakeholders from
around the business to look at the potential financial risks and opportunities presented by climate change, and then carry out qualitative
scenario analysis. For example, if you are a brewing corporation what would happen if you ran out of water in critical production locations or
if the costs of water rise dramatically? If you’re an oil company, will you still have a market for your products in ten or 20 years’ time? After
that, companies can start building sophisticated models that properly project the full gamut of financial risks and opportunities associated
with climate change, eventually integrating these models into their decision making and adapting the business strategy accordingly.
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Significant progress but a long way to go

Half the world’s largest companies are acknowledging climate change as a financial risk so the glass is
definitely half full. There has been significant progress over the last decade, and the ground-breaking work of
the Task Force on Climate-related Financial Disclosures (TCFD) should encourage even further disclosure in
the future. But we still have an incredible distance to travel – and even 100 percent disclosure will not on its
own move the world to a two degrees (or less) trajectory. That’s why we need to keep pushing for further
action beyond disclosure.
We do need to see change on a global level though – driven by the standard setters that help regulate global
markets. I’d like to see the International Organization of Securities Commissions change its listing rules to Steve Waygood
promote climate-related disclosure.
Chief Responsible
Investors have a key role to play in improving the quality of disclosure. I would urge others to take an active Investment Officer,
approach to ownership and stewardship through engagement and voting. At Aviva Investors, we are Aviva Investors
encouraging the companies we own to examine their exposure to climate risk. We will ask them how they plan
to act on the TCFD recommendations and we have already announced that we will vote against companies that do not disclose against the
TCFD’s recommendations.
There is also a role for governments and regulators – more needs to be done to extend the valuable work the TCFD has accomplished. I am
skeptical that voluntary disclosures will get us far enough, fast enough; research shows it is only when governments mandate disclosure
that it becomes widespread, consistent and comparable.
The relatively low rates of Financial Services companies currently acknowledging climate change as a financial risk is a sector-specific
concern. However, the recommendations of the TCFD show the way forward and include guidance on how the finance sector can
implement the guidelines. I would like to see more of the world’s leading financial institutions publishing their own response to TCFD, as
Aviva has done. In order to drive further climate-related risk disclosure in future, I would like to see governments and regulators fund
publicly available sector-based climate risk scenarios to help boards govern the risks and produce their own company level scenario plans.
The more that companies use consistent inputs to their decision making, the more comparable their disclosures will be and this will help the
finance sector manage climate risks more effectively.
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Linking CR activity to
the Sustainable
Development Goals
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SDGs emerge as a clear trend in CR reporting

In September 2015, the UN adopted the Sustainable
Development Goals (SDGs), a set of 17 goals to end
poverty, protect the planet, and ensure prosperity for
all as part of a new global sustainable development
agenda. Each goal has specific targets to be achieved
over the next 15 years.
KPMG’s survey shows that the SDGs have resonated strongly with
businesses worldwide in less than two years since their launch. Around four
in ten CR reports from both N100 and G250 companies make a connection
between the company's CR activities and the SDGs.
This is a clear trend that has emerged in a short space of time and strongly
suggests that the SDGs will have a growing profile in CR reporting over the
next two to three years.
Number of companies that connect their CR activities

to the SDGs
N100
39%
G250
43%
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World’s top 10 countries for connecting CR activity with the SDGs

Acting on
There are only three countries where a majority of the top 100 companies reference the SDGs in their CR reporting, although
others come close. All the top 10 are European or Latin American countries. the SDGs is
the next
challenge
60
Sweden
58
Portugal
51
Mexico
47
France
47
Netherlands
Swedish
companies are
leading the world
when it comes to
Tomas
referencing the Otterström
SDGs in their Partner,
reporting and there Sustainability
are many reasons Services, KPMG
behind this including in Finland and
culture and politics. KPMG
Nordic companies in Sweden
in general are
increasingly interested in demonstrating
how they create value in society and the
SDGs provide a means for doing so.
46 46 44 43 41 The next challenge for business is to

come through with meaningful
contributions to the global effort to
achieve the SDGs. Reporting needs to
Finland Spain Colombia UK Italy evolve so that it can quantify, verify and
effectively communicate what impact
companies are actually having on the
goals.

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Forestry & Paper sector

High profile Slow
leads worldwide
publicity for uptake of
65%
of Forestry & Paper
SDGs pays SDGs in companies make a
dividends in ASPAC will connection with the
SDGs in their CR
Latin gain pace in reporting. This is the
America more highest sectoral rate
developed among the N100 sample.
In Latin Ricardo Zibas Sung Woo Kim
America, there has Director, markets Regional Lead for
been huge effort Sustainability Sustainability Forestry companies
on the part of Services, KPMG in In general, Services in ASPAC
NGOs and industry Brazil business awareness and Partner, are often early
bodies like the and understanding KPMG in South adopters in CR
WBCSD to publicize the SDGs as the of the SDGs in Asia Korea
preeminent framework for designing and Pacific is relatively
In 2015, we revised our
implementing sustainability activities. low right now.
corporate responsibility targets,
Additionally, thanks to the way the SDGs What’s more, reporting trends in the region setting a new timeline of 2030 and
were designed, many companies have tend to be driven by mandatory increasing our level of ambition.
mapped their existing CR reporting onto disclosure requirements from That process coincided with the Sami Lundgren
to SDGs in order to demonstrate how governments, stock exchanges and launch of the SDGs, which also
they are contributing to sustainable investors, and the SDGs have yet to fully have a timeline of 2030, so it Vice President,
development. take root among these particular seemed logical for UPM to align Environment and
stakeholders. its own corporate responsibility Responsibility, UPM
Regulators and industry bodies are also
supportive. For example, The Brazilian However, I do think adoption of the SDGs strategy and targets with the
Corporate Sustainability Index, an index in Asia Pacific will increase in the years to global goals. While the timing of the SDGs was fortunate for
on the Sao Paolo Stock Exchange, come. In the more economically us, it doesn’t surprise me that the Forestry & Paper sector
encourages companies to commit to the developed countries such as Australia, as a whole has been progressive in linking its corporate
SDGs and embed them in their South Korea and Taiwan, it is only a responsibility activities to the SDGs. In many countries, the
management approach. matter of time before more companies Forestry & Paper sector is relatively mature in its
embrace the SDGs; for now the largest sustainability approach. Many forestry sites have contributed
global companies are setting the pace in to the wellbeing of local communities for more than a
doing so. For developing countries, the century and, at the same time, the industry has had to
transition to including the SDGs in ensure that it uses natural resources like timber and water in
corporate responsibility vision and a responsible manner. As a result, Forestry & Paper firms
strategy will be slower unless are often among the first to adopt new corporate
regulation is introduced. responsibility practices.
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SDG reporting among the 58%

Utilities
world’s largest companies 58%

Automotive
National view: G250 companies that connect CR activity

with the SDGs 57%
Among the world's largest companies (G250), European companies are leading Retail
the way, while US companies lag behind.
Sectoral view:
G250 companies
that connect CR 56%
83% Germany
activity with the
SDGs
Technology, Media &
Telecommunications
G250 companies in
consumer-facing sectors
63% France
are leading the pack
when it comes to
connecting their CR
activities with the SDGs.
47%
Healthcare
In heavy industry, it is the
60% UK
exception not the rule.
37%
Financial
Services
46% Japan 30%

Industrials,
Base: 233 G250 companies that report Manufacturing
31%
on CR & Metals
Source: KPMG Survey of Corporate
Responsibility Reporting 2017
US
Note: Graphic shows only sectors
where 10 or more G250
companies are headquartered 28%
Oil & Gas
Base: 233 G250 companies that report on CR

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Acknowledging
human rights as a
business issue
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Human rights is firmly on the

agenda as a global business issue
Most companies acknowledge the issue, but many have yet to disclose
a policy.
In 2011, the UN endorsed the Guiding Principles on Business & Human Rights. These principles establish the
responsibility of businesses to respect human rights, avoid infringing them and to remedy any negative human
rights impacts they are involved with.
Six years on, KPMG’s survey shows that a majority of the world’s largest companies now recognize human
rights as a business issue. Almost three quarters (73 percent) of N100 CR reports and nine out of ten (90
percent) G250 reports acknowledge the issue.
However, despite the high number of companies acknowledging human rights as a business issue, only around
two thirds of these (62 percent of both the G250 and N100) report that they have a human rights policy in place
at their organizations. The human rights policy is the fundamental building block of corporate action on human
rights; therefore the lack of such a document at many companies suggests they still have work to do.
Furthermore, only one third of those acknowledging the issue also referenced the UN Guiding Principles which
indicates that only a minority of businesses are yet prepared to align themselves publicly with the Principles.
CR reports that acknowledge human rights as an issue for the business
73% 90%
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. www.kpmg
pmg..com/
om/ccrre
rrepo
porting
rting | 44
International.
No member firmKPMG
hasInternational
any authorityprovides
to obligate
no client
or bindservices.
KPMG International
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firm
anyhas
other
anymember
authorityfirm
to obligate
third parties,
or bindnor
KPMG
does International
KPMG International
or any other
have member
any such firm
authority
third to obligate or bind any member firm. All rights reserved.
parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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North America and Eastern Europe lag behind

We are at a tipping Western European companies are the most likely worldwide to acknowledge human
rights as a business issue, but rates are significantly lower in Eastern Europe, North
point for business and America and the Middle East & Africa.
human rights
Regional view: CR reports that acknowledge human
We’re reaching a tipping rights as an issue for the business
point where the vast majority of
companies now acknowledge
human rights as an issue for their
business. Richard Boele
75% 72% 69% 68%
This progress is heartening. KPMG Global
However, challenges remain. Business & Human
Around a third of companies that Rights Leader and
acknowledge human rights as a Partner, KPMG in
business issue also refer to the UN Australia Europe Asia Pacific Americas Middle East
Guiding Principles in their CR & Africa
reports, but many still lack the
ability to implement these principles. Companies must
move from simply reporting human rights risks to 79%
identifying, responding to and remediating the impacts.
71%
This will require a step change in mindset.
65%
What’s more, over the next few years, a significant 61%
amount of work is required to further test and explore
what good human rights business performance actually
looks like. For example, are financial proxies the right
way to go? Does putting a dollar value on human rights
help or harm people, and does it actually help
companies understand their human rights performance?
What alternative ways are there to measure
performance? These questions will have to be
answered to ensure continued progress in the field of
business and human rights.
Western Europe North America
Eastern Europe Latin America
Base: 3,543 N100 companies that report on CR

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© 2017 KPMG International©Cooperative

2017 KPMG(“KPMG
International
International”),
Cooperativea Swiss
(“KPMG entity.
International”),
Member firmsa Swiss
of the
entity.
KPMG Member
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provides
KPMGno client services. www.kpmg.com/crreporting
45
No member firm has any authority
International
to obligate
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International
No member
or any firm
otherhas
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havereserved.
any
such authority to obligate or bind any member firm. All rights reserved.
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Companies in India, Corporate reporting on human rights still

has a long way to go
the UK and Japan are We are still in the early days of human rights reporting. The
fact is, it is currently impossible to properly track a company’s
human rights impacts through its annual corporate responsibility
the most likely to reports. So reporting formats will inevitably have to evolve. In future,
I expect to see new forms of disclosure that offer both greater
transparency and timeliness. One example might be through the use
of blockchain technology in the supply chain, which would allow for John Morrison
discuss human rights unalterable reporting and assurance every step of the way.
Awareness of the human rights issues that companies should report
on will also evolve. For example, in the coming years there is
likely to be a backlash against data and technology companies that
Chief Executive,
Institute for Human
Rights and Business
have been collecting and using consumer data en masse. As the right to privacy becomes
The ten countries where companies are most likely increasingly prominent, big data and technology companies will have to be more transparent
to discuss human rights in their CR reporting are in about how they collect, store, and use our information.
Western Europe, Latin America and Asia Pacific. The language and ideas of human rights are also likely to be a basis for a future universal
India, the UK and Japan lead the world, and all framework for social impact reporting among global businesses. While other frameworks
abound, the concept of human rights has been around for 70 years. This means it has
three countries have some regulation in place long been understood and is widely accepted – even if it can be an uncomfortable fit for
mandating or encouraging human rights some businesses.
disclosure.
Number of N100 companies that acknowledge
human rights in CR reporting: top ten countries
Regulation driving human rights reporting
95 in India
85 83 82 78 77 76 74 72 72
The recent ratification by India of International Labour Organization
(ILO) Conventions 138 and 182 clearly indicates the importance of human
rights to the country. From a corporate reporting point of view, the
Business Responsibility Report (BRR), an annual disclosure mandated by
the Securities and Exchange Board of India (SEBI), requires the top 500
listed companies to report on nine core principles, one of which focuses
on human rights. This mandate can be credited as the driver for most of Santhosh
Brazil
Portugal
Mexico
India
UK
Japan
Taiwan
Sweden
France
Denmark
India's top 100 companies proactively disclosing their performance on Jayaram

human rights practices while also substantiating the same through
existing policies and mechanisms. Partner, Sustainability
Services, KPMG
in India
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Mining companies are the most likely to acknowledge

human rights
The Mining sector leads when it comes to acknowledging human
rights as a business issue, with almost nine in ten reporters in the Human rights is a challenging
N100 doing so (and 100 percent among the G250). but critical issue for Financial
This high rate might be expected given that mining companies rely on good relationships with
Services firms
local communities in order to operate their mining assets successfully over long periods.
Reporting on human rights performance can be an essential part of maintaining social license- Financial services firms have a
to-operate for these businesses. The same can be said for the Oil & Gas sector where a responsibility to respect human rights wherever
relatively high 77 percent of reporters in the N100 acknowledge human rights as a they do business. While the due diligence
business issue. process can be challenging – especially
considering the types of financing and various Val
Val Smith
Smith
Financial Services trails among the N100 (66 percent), although rates are far higher (92 clients across sectors – it’s incumbent on the
percent) among G250 Financial Services firms. This suggests a large gap in reporting on company to identity potential impacts, and to Director and Head
Director and Head
human rights between very large global Financial Services firms and the next tier down. understand its leverage to drive change as a of Corporate
of Corporate
lender, investor or insurer. The pressure to act Sustainability,
Sustainability,
Sectoral view: Companies acknowledging human rights as an issue from investors and other stakeholders is ever Citigroup
Citigroup
for business increasing and inaction can have significant
business and reputational impacts on a company.
88% 84% 83% 80% 77% 75% 75% 71% 70% 70% 69% 69% 68% 66% Some relatively smaller Financial Services firms may lack the
63%
resources and experience to tackle human rights as a business issue
compared to large global companies, which may account for the
differences between G250 and N100 Financial Services firms in this
survey. While this is a very real challenge felt by many, so too are the
risks of avoiding this issue, which could potentially hinder companies’
Financial Services
Utilities
Retail
Construction & Materials
Healthcare
Mining
Automotive
Technology, Media &
Oil & Gas
Chemicals
Forestry & Paper
Transport & Leisure

Personal & Household
Industrials, Manufacturing
Food & Beverages
ability to do business in future.

Telecommunications
Companies of all sizes can only benefit from understanding the

Goods
& Metals
connections between their business and human rights, one step at a

time if needed.
Base: 3,543 N100 companies that report on CR

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Linking carbon
targets to the global
climate goal
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More companies set carbon targets

A solid majority of the world’s largest companies (G250) now
disclose targets to cut their carbon emissions: the percentage in Pressure grows to link carbon
2017 stands at 67 percent of reporting companies up from 58 targets to the bigger picture
percent in 2015.
Public scrutiny of companies’ carbon
Among the N100, this survey shows that 50 percent of reporting companies set emissions has ratcheted up since the adoption
carbon reduction targets (no figure available for 2015). of The Paris Agreement on Climate Change in
2015. Under the agreement, almost every
Yet, of those that do set internal carbon reduction targets for their business, around
country in the world has committed to play an
two thirds of both N100 and G250 companies do not acknowledge the external targets
active part in keeping the global temperature
being set by national governments, regional authorities (such as the EU) or the UN. rise to 2°C or less above pre-industrial levels. Adrian King
G250 companies that set carbon reduction targets Against this background of global commitment KPMG Global
to climate action, it is no longer considered Sustainability
enough for companies to set arbitrary carbon Reporting &
reduction targets with no connection to the Assurance Leader
bigger picture. Instead, pressure is growing on and Partner, KPMG
companies to cut their carbon emissions in line Australia
with the greater global goal.
As a result, in coming years, KPMG expects to
58% 67% see many more companies setting carbon

reduction strategies that are linked to national,
regional or global climate goals, and
communicating those strategies more clearly in
their CR reporting.
G250
2015
2017
Base: 233 G250 companies that report on CR

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Most carbon targets are not linked to greater climate goals

Around one quarter reference Paris Agreement goal
Science-based targets
Although most companies (around two thirds) that set carbon targets for their business
don’t yet acknowledge the external targets being set by governments and others, a
gain ground
significant minority of around one third does. KPMG analysts expect this minority group to
Science-based targets help companies
grow into the majority over the next 5 years.
demonstrate to investors, suppliers, their
Of those that do link their own carbon targets to external targets, the majority refer to The workforce and the general public that they are
Paris Agreement 2°C goal. This equates to around one quarter (23 percent) of companies prepared for the transition to a low-carbon
that disclose carbon targets. This does not necessarily mean that these companies have yet economy. With a clear direction of travel set by
more than 190 countries in The Paris Agreement,
fully aligned their targets with The Paris Agreement, but they have at least acknowledged
the global climate goal in their reporting.
science-based targets reduce risks and help Alberto Carrillo
companies align to the low-carbon economy of
Pineda
tomorrow.
Leader of Science
Companies linking their carbon reduction targets to We expect the use of science-based targets to
Based Targets (SBT)
increase significantly as investors seek a uniform
national, regional or global goals view of their investments worldwide and look for
Initiative, CDP
69% assurance that these companies are well set for

63% a low-carbon future. Likewise, a growing number
of companies are looking at their supply chains
23% 23% as a way to reduce their indirect emissions, and
in many cases, are looking at science-based
6% 7% 6% target setting as a tool to accomplish this. These
2%
trends, along with the 300+ companies that have
already committed to set a science-based target
Linked to global 2o Linked to regional Linked to national through the SBT initiative, will help turn science-
Not linked to any other based target setting from a relatively new
target (Paris targets (e.g. EU targets
targets practice into a common business practice.
Agreement) targets) (NDCs/INDCs)
N100
G250
Base: 1,765 N100 companies that report carbon reduction targets, 156 G250 companies that report carbon reduction targets
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How we can help

KPMG’s Sustainability Services network Specialists in corporate responsibility Specialists in carbon and climate risk
comprises several hundred sustainability reporting and assurance reporting
professionals at around 60 KPMG member Our professionals can help you to: Our professionals can help you to:
firms worldwide.
— Understand the environmental and social — Comply with the TCFD recommendations on
Local knowledge, global experience issues that are material for your organization disclosure of climate-related financial risk
and your stakeholders
Our network combines specialist sustainability expertise with — Understand and comply with carbon-reduction
in-depth understanding of the business landscape in your — Align your corporate responsibility activities and carbon reporting legislation worldwide
country. At the same time, our member firms are connected with the Sustainable Development Goals and
— Become familiar with best practice carbon
through our Global Center of Excellence for Sustainability assess your contributions to achieving the
reporting and benchmark your reporting against
Services and can access the best international experience for goals
peers
whatever challenge your organization faces. — Choose the right reporting approach and
— Report carbon information to the CDP
frameworks for your business
Integrated services
— Gain third-party assurance of your carbon and
— Integrate financial and non-financial information
As well as working shoulder-to-shoulder with our clients, we climate risk data
in your reporting
work closely with our KPMG colleagues right across the KPMG
— Identify and reduce climate-related risk in your
network including Tax, Audit, Risk Consulting, Deal Advisory — Report information for specific purposes, such
supply chain.
and Management Consulting. This means we can integrate as sustainability indices
sustainability services into a seamless solution for your
— Benchmark the quality of your reporting against
business needs. Specialists in business and human
industry peers
— Gain independent assurance for your internal
rights
and external reporting systems and for your KPMG has a dedicated network of specialist
corporate responsibility or sustainability consultants in business and human rights. Our
reporting professionals can help you to:
— Verify the sustainability performance of your — Design your human rights policy and build
suppliers. internal commitment
— Assess the human rights risks in your
Contact operations and supply chain
— Develop strategies to prevent and mitigate any
KPMG Global Center of Excellence for human rights impacts
— Monitor and report on your organization’s
sustainabilityservices@kpmg.com human rights performance.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of©independent
2017 KPMGfirms
International
are affiliated
Cooperative
with KPMG (“KPMG
International.
International”),
KPMG aInternational
Swiss entity.
provides
Member nofirms
clientofservices.
the KPMG www.kpmg.com/crreporting | 51
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does
network
KPMGofInternational
independenthave
firms any
aresuch
affiliated
authority
withtoKPMG
obligate
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or bind anyKPMG
member
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reserved.
no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties,
nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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Methodology
Professionals at 49 KPMG member firms carried N100 research sample: national breakdown
out thousands of hours of research for this The N100 research sample in this survey includes companies headquartered in the following 49
survey. They reviewed annual financial and countries and regions. Five KPMG member firms participated in the research for the first time in 2017:
corporate responsibility reporting from the Austria, Cyprus, Luxembourg, Thailand and Turkey. Indonesia, which participated in the 2015 survey,
did not participate in 2017. Some findings of this survey point to the underlying trend which is based on
largest 100 companies, by revenue, in their own
the 44 countries that participated in both the 2015 and 2017 surveys.
countries and regions.
Research sources included PDF and printed reports as well as
1. Angola 19. Ireland 37. Slovakia
web-only content published between 1 July 2016 and 30 June
2017. If a company did not report during this period, reporting 2. Australia 20. Israel 38. South Africa
from 2015 was reviewed. However, no reporting published prior 3. Austria 21. Italy 39. South Korea
to June 2015 was included in the research for this survey. 4. Belgium 22. Japan 40. Spain
The survey findings are based on analysis of publicly available 5. Brazil 23. Kazakhstan 41. Sweden
information only, and no information was submitted directly by 6. Canada 24. Luxembourg 42. Switzerland
companies to KPMG member firms.
7. Chile 25. Malaysia 43. Taiwan (ROC)
The survey refers to two research samples: 8. China 26. Mexico 44. Thailand
9. Colombia 27. New Zealand 45. The Netherlands
The N100 – the largest 100 companies in each
of 49 countries: 4,900 companies in total. 10. Cyprus 28. Nigeria 46. Turkey
11. Czech Republic 29. Norway 47. United Arab Emirates
Professionals at KPMG member firms identified the N100 in their 12. Denmark 30. Oman 48. UK
country based on a recognized national source, or where a
13. Finland 31. Peru 49. US
ranking was not available or was incomplete, by market
capitalization or another appropriate measure. All company 14. France 32. Poland
ownership structures were included in the research: publicly- 15. Germany 33. Portugal
listed and state, private and family-owned. 16. Greece 34. Romania
17. Hungary 35. Russia
The G250 – the largest 250 companies in the world. 18. India 36. Singapore
The G250 was identified as the top 250 companies listed in the
Fortune Global 500 ranking for 2016.1 The G250 is for the most
part a subset of the N100 research sample. 7 companies in the
G250 sample are not included in the N100.
1http://fortune.com/global500/2016 Accessed 27 September 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG© 2017 KPMGof
network International
©independent
2017 KPMG Cooperative
firms (“KPMG
International
are affiliated International”),
Cooperative
with KPMG(“KPMG aInternational”),
Swiss entity.
International. KPMGMember firmsprovides
aInternational
Swiss entity. ofMember
the KPMG
nofirmsnetwork
client the of
ofservices.
KPMG www.kpmg.com/crreporting | 52
No member firm has any authority to obligate or bind KPMG International or any other member firm thirdindependent
parties, nor firms
does are
network
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ofInternational
independent have
firmsInternational.
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or bind any member firm. All rights reserved.
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N100 research sample: regional breakdown N100 research sample: sectoral breakdown
Financial Services 18%
22% 11%
Industrials, Manufacturing & Metals
49% Technology, Media &

Telecommunications (TMT) 10%
Retail 9%
Food & Beverages 8%
Transport & Leisure 7%

Europe Asia Pacific
Utilities 6%
(Western Europe 37%,
Eastern Europe 12%)
Automotive 6%
Construction & Materials 5%
Oil & Gas
14%
5%
14% Healthcare
4%
Personal & Household Goods
3%
Chemicals
3%
Americas Middle East Mining
& Africa 2%
(North America 4%,
Latin America 10%) (Middle East 8%,
Forestry & Paper
1%
Africa 6%) Other
2%
Base: 4,900 N100 companies Base: 4,900 N100 companies

Source: The KPMG Survey of Corporate responsibility Reporting 2017 Source: The KPMG Survey of Corporate responsibility Reporting 2017
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KPMG
No
International.
member
International.
firm
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G250 research sample: number of G250 companies in each country G250 research sample:
regional breakdown
40%
Spain France UK The Netherlands Germany Switzerland Italy Russia
37%
4 20 10 5 18 5 5 4 35%
33%
30%
30%
25 25%
Japan 20%
15%
75 7
10%
South
US Korea
5%
2 5 4 3 49
0%
Mexico Brazil India Australia China
Americas
Europe
Asia Pacific
1 Taiwan 1 Norway 1 Luxembourg 1 Belgium 1 Indonesia
1 Thailand 1 Malaysia 1 Denmark 1 Saudi Arabia

Base: 250 G250 companies Source: The KPMG Survey of Corporate responsibility
Source: The KPMG Survey of Corporate responsibility Reporting 2017 Reporting 2017
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©
© 2017
2017 KPMG
KPMG International
Swiss entity.
entity. Member
Member firms
firms of
of the
the KPMG
KPMG network
independent firms
firms are
are affiliated
affiliated with
with KPMG
KPMG International.
International. KPMG
KPMG International
provides nono client services. www.kpmg.com/crreporting | 54
client services.
No member Nohas
firm member firm has
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any other member otherthird
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any member anyAll rights reserved.
firm.
member firm. All rights reserved.
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G250 research sample: Industry classification

sectoral breakdown
Companies were allocated to an industry sector according to the International Classification Benchmark (ICB) system.
Automotive Oil & Gas

Financial Services 23% Automobiles, Parts and Tires Oil & Gas Producers, Exploration & Production,
Integrated Oil & Gas
Technology, Media & Chemicals
Telecommunications 13% Commodity Chemicals, Specialty Chemicals Personal & Household Goods
(TMT) Household Goods & Home Construction (Durable
Construction & Materials Household Products, Non-durable Household Products,
Furnishings, Home Construction), Leisure Goods
Oil & Gas 10% Building Materials & Fixtures, Heavy Construction
(Consumer Electronics, Recreational Products, Toys),
Personal Goods (Clothing & Accessories, Footwear,
Industrials, Financial Services
Personal Products)
Manufacturing 10% Banks, Non-life Insurance, Life Insurance, Real Estate
& Metals Investment & Services, Real Estate Investment Trusts,
Retail
Financial Services, Equity Investment Instruments, Non-
General Retailers (Apparel Retailers, Broadline Retailers,
equity Investment Instruments
Retail 8% Home Improvement Retailers, Specialized Consumer
Services, Specialty Retailers), Food & Drug Retailers
Food & Beverages
(and Wholesalers),
Beverages (Brewers, Distillers & Vintners, Soft Drinks),
Automotive 8% Food producers (Farming, Fishing & Plantations, Food
Transport & Leisure
Products), Tobacco
Travel & Leisure (Airlines, Gambling, Hotels,
Healthcare 6% Recreational Services, Restaurants & Bars, Travel &
Forestry & Paper Tourism), Industrial Transportation (Delivery Services,
Forestry and Paper Marine Transportation, Railroads, Transportation
Utilities 5% Services, Trucking)
Healthcare
Pharmaceuticals & Biotechnology, Health Care Technology, Media & Telecommunications (TMT)
Food & Beverages 4% Equipment & Services (Health Care Providers, Medical Fixed Line Telecommunications, Mobile
Equipment, Medical Supplies) Telecommunications, Software & Computer Services
(and Internet), Technology Hardware & Equipment
Construction (Computer Hardware, Electronic Office Equipment,
& Materials 3% Industrials, Manufacturing & Metals
Industrial Metals & Mining (Aluminium, Non-ferrous Semiconductors, Telecommunications Equipment),
Metals, Iron & Steel),Aerospace & Defense, General Electronic & Electrical Equipment, Media (Broadcasting
Transport & Leisure 2% Industrials (Containers & Packaging, Diversified & Entertainment, Media Agencies, Publishing)
Industrials), Industrial Engineering (Commercial Vehicles
& Trucks, Industrial Machinery), Oil Equipment, Services Utilities
Personal & Electricity, Gas, Water & Multi-utilities
Household Goods 2% & Distribution (including Pipelines), Alternative Energy
(Renewable Energy Equipment, Alternative Fuels)
Other
Chemicals Support services (Business Support Services, Business
2% Mining
Training & Employment Agencies, Financial
Coal, Diamonds & Gemstones, General Mining, Gold
Administration, Industrial Suppliers, Waste & Disposal
Mining, Platinum & Precious Metals
Other Services)
3%
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity.© 2017

Member KPMG
firms
International
of the KPMG Cooperative
network of(“KPMG
independent
International”),
firms are affiliated
a Swiss entity.
with KPMG
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firms of the
KPMG
KPMG International
network of provides
independentno client
firmsservices.
are www.kpmg.com/crreporting
www.kpmg.com/crreporting
| 55| 55
No member
Base: firm
250 hascompanies
G250 any authority to obligate or bind KPMG International or any
affiliated
other member
with KPMGfirmInternational.
third parties, KPMG
nor does
International
KPMG International
provides nohave
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authority
memberto obligate
firm. All or
rights
bindreserved.
KPMG
International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
Source: The KPMG Survey of Corporate responsibility All rights reserved.
Reporting 2017
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Acknowledgments
Lead authors Researchers
Kugu Alper Desislava Kavaldzhieva Maximiliano Ordoñez

Dimitris Apostolidis Marcin Kawa Julia Paterson
Rahul Arora Michaela Kegel Ana Perez Uematsu
Carmen Auer Honza Kerver Caroline Pope
Michael Bancroft Nina Killstrom Lucie Prajzlerova
Joanne Beatty Radoslaw Kowalski Prathmesh Raichura
Mike Boonen Diana Kozhemzharova Nathalie Rondeau
José Luis Blasco Adrian King
Salvador Javier Cavero Artero Anikó Kraft Anette Rønnov
Global Head, KPMG KPMG Global Catherine Chung Raema Elysha Kvithyatharan Martim Santos
Sustainability Services Sustainability Reporting
Nathalie Clement Michelle Kwa Katharina Schoenauer
& Assurance Leader
Roopa Davé Zoe Li Celeste Sepulveda
Gargi Dhongde Francesca Lifrieri Markellos Sergiou
Leopald Eggersdorfer Fernando Lopez Hetika Shah
Åsa Ekberg Angelica M Joya Rony Shalit
Co-authors
Cherine Fok Sebastian Martheyn Ang-Ting Shih
Patrick Francois Luciano Massatoshi Ana Stivanin
Lucy Hamnett Jozef Melichar Istvan Szabo
Laetitia Hamon Natasha Maryanne Menon Farah Theo
Lorena Herrera Valeria Merino Alin Tiplic
Michiel Huijgen Erica Miles Ekaterina Trutneva
Brice Javaux Marieke Miltenburg Carmit Tzur
Santhosh Jayaram Dhiraj Kumar Mishra Arnaud Van Dijk
Mark McKenzie Madeleine Karn Ricardo Jimenez Steven Mulkens Julie Vasadi
Director, KPMG Global Assistant Manager, Imran Jiwa Gabit Musrepov Harsh Vasoya
Center of Excellence for KPMG Global Center of Katie Kaars Sijpesteijn Charnyapornpong Natchawat George Wales
Sustainability Services Excellence for Viliam Kaceriak Eddie Ng Kim Webb
Shruti Karkhedkar Chinedu Odunukwe Andrea Hwa-Young Woo
Shoko Kato Gloria Ojo Heather Zanoni
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network © 2017
of independent
KPMG International
firms areCooperative
affiliated with
(“KPMG
KPMGInternational”),
International. KPMG
a Swiss
International
entity. Member
provides
firmsnoofclient
the KPMG
services.
network of www.kpmg.com/crreporting | 56
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor
independent
does KPMG firms
International
are affiliated
havewithanyKPMG
such International.
authority to obligate
bind any member
providesfirm.
no client
All rights
services.
reserved.
No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG
International have any such authority to obligate or bind any member firm. All rights reserved.
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Local contacts
Argentina Denmark Kazakhstan Russia, Ukraine, UK
Martin Mendivelzua Niels Vendelbo Saken Zhumashev Georgia & Armenia Paul Holland
mmendivelzua@kpmg.com.ar nielsvendelbo@kpmg.com szhumashev@kpmg.kz Igor Korotetskiy paul.holland@kpmg.co.uk
ikorotetskiy@kpmg.ru
Australia Finland & Sweden Luxembourg US
Adrian V. King Tomas Otterström Gilles Poncin Singapore Katherine Blue
Global Sustainability Reporting & tomas.otterstrom@kpmg.fi gilles.poncin@kpmg.lu Sharad Somani kblue@kpmg.com
Assurance Leader sharadsomani@kpmg.com.sg
France Malaysia Uruguay
avking@kpmg.com.au
Philippe Arnaud Kasturi Nathan Slovakia Martin Clerino
Austria parnaud@kpmg.fr kasturi@kpmg.com.my Quentin Crossley martinclerino@kpmg.com
Peter Ertl qcrossley@kpmg.sk
Germany Mexico
pertl@kpmg.at Venezuela
Jens Laue Jesus Gonzalez South Africa
Jose O. Rodrigues
Azerbaijan jlaue@kpmg.com jesusgonzalez@kpmg.com.mx Shireen Naidoo
jrodrigues@kpmg.com
Vugar Aliyev shireen.naidoo@kpmg.co.za
Greece Netherlands
valiyev@kpmg.az
George Raounas Bernd Hendriksen South Korea
Belgium graounas@kpmg.gr hendriksen.bernd@kpmg.nl Sungwoo Kim
Mike Boonen Regional Leader, Asia Pacific KPMG’s Global Center of
Hungary New Zealand
mboonen@kpmg.com KPMG Sustainability Services Excellence for Climate Change
István Szabó Erica Miles sungwookim@kr.kpmg.com and Sustainability
Brazil istvan.szabo@kpmg.hu emiles@kpmg.co.nz
Ricardo Zibas Spain sustainabilityservices@kpmg.com
India Nigeria kpmg.com/sustainability
rzibas@kpmg.com.br José Luis Blasco Vazquez
Santhosh Jayaram Tomi Adepoju Global Head, KPMG
Canada santhoshj@kpmg.com tomi.adepoju@ng.kpmg.com
The information contained herein is of a general nature
Sustainability Services and is not intended to address the circumstances of any
Bill J. Murphy jblasco@kpmg.es particular individual or entity. Although we endeavor to
Indonesia Norway
billmurphy@kpmg.ca provide accurate and timely information, there can be no
Craig Rawlings Anette Rønnov guarantee that such information is accurate as of the date
craigrawlings@kpmg.com.sg Switzerland
Chile anette.ronnov@kpmg.no it is received or that it will continue to be accurate in the
Anne Van Heerden future. No one should act on such information without
Luis Felipe Encina
Ireland Peru annevanheerden@kpmg.com appropriate professional advice after a thorough
lencina@kpmg.com examination of the particular situation. The views and
Michael Hayes Rosario Calderon
michael.hayes@kpmg.ie Taiwan opinions expressed herein are those of the
China rccalderon@kpmg.com interviewees/survey respondents and do not necessarily
Niven Huang represent the views and opinions of KPMG International
Maria Cheng Caroline Pope Philippines nivenhuang@kpmg.com.tw and/or any KPMG member firm.
maria.cheng@kpmg.com caroline.pope@kpmg.ie Henry D. Antonio © 2017 KPMG International Cooperative (“KPMG
Thailand International”), a Swiss entity. Member firms of the
Colombia Israel hantonio@kpmg.com Paul Flipse KPMG network of independent firms are affiliated with
Maria Teresa Agudelo Oren Grupi
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© 2017 KPMG International Cooperative (“KPMG©International”),

About this survey

Research samples: the N100 and G250

4,900 survey issue CR reports.

Acknowledging human rights as a business issue

Human rights is firmly on the

Linking carbon targets to the global climate goal

A solid majority of reports from the world's largest

N100 companies continue to catch up with the G250

Reporting in Mixed picture in Europe, Middle East & Africa continues

Corporate responsibility reporting rates by region

CR reporting in the Americas

region to become the leading region for CR

CR reporting rates in Asia Pacific have 0

Full effect of EU Directive will be seen

CR reporting rates: North America

A number of factors are driving CR reporting in Latin

Base: 700 N100 companies in the Americas

CR reporting rates: Western Europe

Base: 2,400 N100 companies in Europe

Regulation, stock exchanges and investor pressure drive

National rates of CR reporting, 2015 and 2017

UK Japan India Malaysia France Denmark South Africa US Mexico

Presence of CR reporting Government Mandatory Voluntary Stock Exchange Mandatory Voluntary

Base: 4,900 N100 companies

Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017

National rates of CR reporting, 2015 and 2017

Norway Taiwan Sweden Nigeria Spain Brazil Singapore Canada Chile

New Thailand Peru Belgium Austria Poland Luxembourg Slovakia Greece

Presence of CR reporting Government Mandatory Voluntary Stock Exchange Mandatory Voluntary

Base: 4,900 N100 companies

Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017

Foreign investment helps to New Zealand Stock Exchange

Stock exchange pushes up CR CR reporting gains momentum

Future reporting regulation to Stock exchanges transitioning

Lagging sectors CR reporting rates by sector

Oil & Gas 81%

Food & Beverages 73%

__ More than two thirds of companies in

3 their CR performance Industrials, Manufacturing & Metals

58% 2017 2015

Base: 4,900 N100 companies

More companies include CR data in annual

56% 60% 78%

Base: 4,900 N100 companies and 250 G250 companies

Three key factors encouraging data integration in US reporting

Integrated Reporting takes off in certain countries

The number of companies that specifically label their reports

South Africa Japan Spain The Netherlands

Around two thirds of these also reference the International

Integrated Reporting seen Governance reforms drive

Assurance of CR data continues steady growth

Growth in independent assurance of CR information

2005 2008 2011 2013 2015 2017

Paris Agreement and Financial stakeholders

GRI remains the most popular framework

GRI Standards is also

Base: 2,230 N100 companies that apply the GRI Framework

Three quarters of companies worldwide yet to

Companies that acknowledge the financial risk of climate change

Base: 4,900 N100 companies and 250 G250 companies

Very few companies quantify climate